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Final PPI claim deadline pushed back even further

Posted by Ben Tumilty in Banking on 4 January 2017 - Ben is a Credit Analyst at checkmyfile

Let’s be honest, we almost all know someone who has claimed for PPI. You may have even done it yourself. If you aren’t aware of anyone you know claiming for PPI, you would still know of its existence, as the adverts for claims firms seem to populate every TV channel and radio station with advertising space.

If you have paid attention to these – and to be fair, nobody would blame you for tuning out – you might also be aware that there is to be a final claim deadline, currently rumoured to be the middle of 2019, as this is what the Financial Conduct Authority (FCA) has said it was considering.

The industry was expecting the FCA’s decision on this to be made by the end of 2016, but the regulatory has received “a large amount of feedback” in response to their proposal, and as such has had to push this back. It now says it would decide on the deadline within the first quarter of next year. Consequently, those in the industry expect the deadline to be pushed back by a similar timeframe from mid-2019.

A spokesperson for the FCA said about the originally rumoured deadline, “This was subject to a number of variables including the extent and nature of the feedback received in response to the consultation. We committed to issue an update if we were likely to depart from the proposed dates.”

The deadline discussion comes as the Financial Ombudsman Service (FOS) is expecting record PPI queries in 2017. The Ombudsman resolves PPI complaints from consumers when they and their lenders reach deadlock in their disputes, and says that it has received a total of 1.6m PPI complaints so far.

By the end of the 2016-17 financial year, the FOS expects to have resolved more than 170,000 PPI complaints – and based on their plans and budget they expect the number to double for the 2017-18 period, no doubt as a consequence of the looming deadline.

As of October, the PPI bill sat at more than £40bn – and with the expected increase in PPI complaints, this is no doubt set to increase further.

Many adverts will suggest that claiming PPI is complex. The truth is far from this. We would always recommend that you contact the original lender with any dispute that you have and the same principle applies for a PPI complaint – most of the major lenders have their own complaints process clearly defined on their websites, which will explain how to raise your dispute.

Switching current account providers is incredibly easy these days – and I can vouch for that from recent personal experience. But experiencing the process first hand has also served as a reminder that it’s not completely flawless and that if you don’t pay attention, your Credit Rating could take a hit – even if it’s a temporary one.

Professor Edward Altman first published the Altman Z-score formula in 1968 to evaluate the likelihood of a businesses going bust within two years. The legacy of this system lives on, with the fundamental basics of his score helping to shape the Credit Scoring systems we use today - whether that’s a simple application for car finance or assessing the economic strength of an entire nation.

Banks have been warned that they must start to do more to tackle scams where people are tricked into transferring money to a fraudster’s account. The Payment Systems Regulator (PSR) has stated this in a response to a “super complaint” lodged by the consumer group Which? but the Regulator did stop short of suggesting that the banks should compensate customers who had lost out.

Signalling a return to strength and in the organisation’s first acquisition since the 2008 global financial crisis when they purchased HBOS, Lloyds Bank is to buy credit card firm MBNA from Bank of America in a £1.9bn deal.

Mobile bank provider Atom are launching the UK’s first mobile mortgage app. Applications for a mortgage often involve mountains of paperwork and Atom’s mortgage app is designed at reducing the volume of paperwork that applicants have to gather when applying for a mortgage.

In the wake of a crackdown from the Financial Conduct Authority (FCA), the payday lending industry has drastically contracted, represented by a near 70% reduction in overall lending. To draw upon Russell Hamblin-Boone of the Consumer Finance Association, a mere 1.8m short term loans were issued over the course of 2015, compared to 10m in 2012.

The Bank of England has reassessed its 2017 inflation forecast in the wake of Brexit and increased its prediction to triple the current rate of inflation. The UK’s central bank now expects the rate of inflation to reach 2.7% next year, whereas the current level stands at 1%.

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